Extension of wind energy tax incentive still up in the air

The Hillreports that lawmakers from both parties are expected to continue to press for the extension of a wind energy tax incentive, even as President Barack Obama and House Speaker John Boehner continue to bargain a deficit deal.

The 2.2-cent per kilowatt-hour credit for wind power production is slated to expire on Dec. 31, The Hill notes. Supporters of the incentive “hope it will be included in legislation to avoid the 'fiscal cliff' at year's end, but there are no guarantees that an agreement will be reached,” according to the newspaper.

Lawmakers who back the credit “cite a wind industry-commissioned study that says ending it would eliminate 37,000 jobs,” The Hill reports. “They say the uncertainty surrounding the incentive already has scared off installations for next year.”

But the politics will get tricky.

Fiscal conservatives “say the credit is something the nation can no longer afford,” according to the newspaper, and in the House, “a handful of fiscal conservatives from windy interior states and not-so-breezy Southeastern ones have asked Boehner to kill the tax carve-out.”

However, “With 81 percent of wind installations in GOP districts, there are a number of members who are under pressure to ensure the tax break survives,” The Hill says.

The Press & Sun-Bulletin of Binghamton, N.Y., reports the companies' trepidations about fracking are driven by the threat of tough regulations in New York state.

Jim Smith, spokesman for the Independent Oil and Gas Association of New York, tells the newspaper, “If you go to a meeting where there's a majority of our members, they will tell you that the opportunities are not here in New York right now. They will tell you that the opportunities are in Pennsylvania and Ohio, and not New York, and that's not a knock, that's just a fact.”

In recent years, more than 30 municipalities in upstate New York have passed bans on gas drilling, and more than 80 have enacted moratoriums, the Associated Press reported in July.

Thomas West, an attorney for Anschutz Exploration Corp., tells the newspaper that the company is, for the most part, cutting its losses in New York.

“New York state is not a friendly state to do business in,” he says.

In the lead

Shale is a big part of the energy boom in the United States, but the huge deposits of shale gas that have been found outside this country “are proving much more difficult to access,” according to this story from The Wall Street Journal.

“Among the reasons for the glacial pace abroad are government ownership of mineral rights, environmental concerns and a lack of infrastructure to drill and transport gas and oil,” the newspaper reports. “In addition, much less is known about the geology in most foreign countries than in the U.S., where drilling activity has been going on for more than a century.”

The upshot is that the United States and Canada “could remain the main countries to reap the economic advantages of shale development for some time,” The Journal says.

In both countries, “a glut of natural gas and ethane is luring petrochemical companies and fertilizer manufacturers to build new plants — a huge change after years of shifting production abroad,” according to The Journal. In the meantime, states such as Ohio, North Dakota and Texas that have the shale deposits “are getting additional boosts to their local economies from drilling activity.”

Poland once was regarded as one of the more promising plays, but early wells “have hit less gas than expected,” the story notes. China is believed to have more shale oil and gas than the United States, but the problem is that most of it is in arid or heavily populated areas; oil companies “worry they won't be able to obtain enough water to hydraulically fracture the rock,” according to the newspaper.

"There was enormous irrational exuberance for global shale development," Joseph Stanislaw, an independent senior energy adviser to Deloitte LLP, tells The Journal. "Then the industry ran into reality. Global shale will happen and when it does begin, it will take off with the same force we've seen in the U.S. But the timeline will take longer than people think."